Arthur J. Gallagher & Co. v. O'Neill

United States District Court, E.D. Louisiana

November 27, 2017

ARTHUR J. GALLAGHER & CO.v.BRIAN D. O'NEILL

SECTION
“F” (2)

ORDER AND REASONS

JOSEPH
C. WILKINSON, JR. UNITED STATES MAGISTRATE JUDGE

The
presiding district judge has affirmed in all respects my
order of November 6, 2017, Record Doc. No. 89, but has
“remanded for further consideration of the redactions
in the documents not included in the in camera
review.” Record Doc. No. 105 at p. 2 (emphasis added).
Specifically, the remand order directs me to “address
whether Marsh must amend the thousands of documents not
included in the in camera sample to disclose the redacted
information in compliance with the protective order, or
whether Gallagher must accept the documents with the
redactions in place.” Id. at pp. 1-2.

(A)
Timely Objections

Before
addressing the remand directive, I feel compelled to address
Gallagher's misguided persistence in continuing to assert
the erroneous argument that Marsh waived its objections to
Gallagher's subpoena duces tecum by not asserting them
within the 14 days provided in Fed.R.Civ.P.
45(d)(2)(B).[1] In short, I find Gallagher's waiver
argument and the case law it cites to support it, Record Doc.
No. 95-1 at pp. 9-12, erroneous and unpersuasive because they
are contrary to the structure, plain meaning and intent of
Rule 45. The analysis of the leading federal civil procedure
commentators and the court decisions they rely upon, as
outlined below, provide the correct interpretation of the
interplay between the separate and distinct written
objections and motion to quash procedural vehicles set out in
Fed.R.Civ.P. 45(d)(2) and (3).

When a
non-party to a lawsuit, like Marsh, is served with an overly
broad subpoena duces tecum, like the one served by Gallagher
in this case, the non-party has four procedural options.
First, it may ignore the subpoena. This is the worst option,
almost certain to result in a contempt citation under Rule
45(g) and a finding that all objections have been waived.
Second, the non-party may comply with the subpoena, an option
that appears to be less frequently chosen in these
contentious times.

Third,
the non-party “may serve on the party
or attorney designated in the subpoena a written objection to
inspecting, copying, testing, or sampling any or all of the
materials or to inspecting the premises - or to producing
electronically stored information in the form or forms
requested.” Fed.R.Civ.P. 45(d)(2)(B)(emphasis added).
Significantly, this rule uses the permissive
“may.” It does not use the
mandatory “shall” or “must.” The
non-party is not required to serve written
objections. Instead, serving written objections is a less
formal, easier, usually less expensive method of forestalling
subpoena compliance when compared to the separate option of
filing a motion to quash or modify the subpoena, as discussed
below. However, if the subpoena recipient chooses to serve
written objections rather than file a motion to quash or
modify, the objections must be served on the issuing party
“before the earlier of the time specified for
compliance or 14 days after the subpoena is served.”
Id.

This fourteen-day objection period only applies to subpoenas
demanding the production of documents, tangible things,
electronically stored information, or the inspection of
premises . . . . A failure to object within the fourteen-day
period usually results in waiver of the contested issue.
However, the district court, in its discretion, may entertain
untimely objections if circumstances warrant.

Serving
written objections under Rule 45(d)(2)(B) may provide the
recipient with several advantages. For example, asserting
objections can be done informally without going to court,
shifts the burden and expense of commencing motion practice
in court to the issuing party and affords the recipient
additional time in the event the recipient is ultimately
obligated to comply with the demands in the subpoena. Lender,
supra, at p.7.

The
non-party's fourth option is the one that Marsh elected
to exercise in this case. Under Rule 45(d)(3), the subpoena
recipient may move to modify or quash the subpoena as a means
of asserting its objections to the subpoena. Unlike serving
Rule 45(d)(2)(B) written objections, a motion to quash is
not subject to the 14 day requirement. Instead, the
rule provides simply that the motion to quash must be
“timely.” Fed.R.Civ.P. 45(d)(3)(A). As the
leading commentators and the case law they rely upon explain,
the “14-day requirement to object to a subpoena is
not relevant to a motion to quash a
subpoena, . . .” Wright & Miller (emphasis added)
and cases cited at n. 10, including COA Inc. v. Xiamei
Houseware Group Co., Inc., No. C13-771 MJP, 2013 WL
2332347, *2 (W.D. Wash. May 28, 2013) (quoting King v.
Fidelity Nat. Bank of Baton Rouge, 712 F.2d 188, 191
(5th Cir. 1983)); In re Kulzer, No. 3:09-MC-08 CAN,
2009 WL 961229 (N.D. Ind. Apr. 8, 2009), rev'd on
other grounds Heraeus Kulzer, GmbH v. Biomet, Inc., 633
F.3d 591 (7th Cir. 2011) (motion to quash was timely even
though it was not served within 14-day time limit).

““While
‘timely' is not defined in [Rule 45(d)(3)(A)] nor
elaborated upon in the advisory committee notes . . . ., [i]n
general, courts have read ‘timely' to mean within
the time set in the subpoena for compliance.””
In re Ex Parte Application of Grupo Mexico SAB de CV for
an Order to Obtain Discovery for Use in Foreign
Proceeding, No. 3:14-MC-0073-G, 2015 WL 12916415, at *3
(N.D. Tex. Mar. 10, 2015) (quoting U.S. ex rel. Pogue v.
Diabetes Treatment Ctrs of Am., Inc., 238 F.Supp.2d 270,
278 (D.D.C. 2002)) (citations omitted). “It is well
settled that, to be timely, a motion to quash a subpoena must
be made prior to the return date of the
subpoena.” Estate of Ungar v. Palestinian
Authority, 451 F.Supp.2d 607, 610 (S.D.N.Y. 2006)
(emphasis added). In addition, “[c]ourts may excuse
delay for the same reasons that justify delay in serving
written objections, . . .” Lender, supra, at
p. 9 (citations omitted).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In this
case, Gallagher apparently served its objectionable subpoena
on May 19, 2017.[2] The return date provided in the subpoena
for production of the documents was June 21, 2017.
Marsh&#39;s motion to quash was filed on June 7, 2017, Record
Doc. No. 10, two weeks before the return date. The
motion was therefore timely within the meaning of Rule
45(d)(3)(A) and preserved Marsh's objections. Marsh did
not employ the less formal alternative procedural option of
serving written objections. ...

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